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Budget Review Report (FY20-21)

Key Budget Highlights

Income Tax

New income tax rates will be optional without any exemptions/standard Income Tax
Dividend Distribution Tax (DDT) abolished; Companies will not be required to pay DDT; dividends to be taxed only at the hands of recipients, at applicable rates. Holding companies will not be liable to pay tax on the incoming
Govt proposes 100% tax concession to sovereign wealth funds on investment in infra
Housing becomes more affordable, gives tax holiday to affordable housing
New power generation companies will have to pay 15% tax under the new corporate tax
Govt proposes deferment of tax payment by employees on ESOPs from startups by 5 years.
Tax on Co-op societies to be reduced to 22% plus surcharge, as against current 30%.
Fiscal Deficit target been revised to 3.8% for the current year FY20 from earlier target of 3.3%. The government also pegged the FY21 fiscal deficit target to 3.5%. The revised Fiscal Responsibility and Budget Management Act allows the government an ‘escape clause’ of 5%.
Receipts for 2020-21 are pegged at Rs 22.46 lakh crore while expenditure at Rs 30.42 lakh crore and the revised estimated expenditure for FY20 has been pegged at Rs 26.99 lakh crore and receipts at Rs 19.32 lakh
The net market borrowings would be at Rs 4.99 lakh crore in FY 2019-20 and are estimated at Rs 5.36 lakh crore in the next
Government increased the limit of insurance cover in case of bank failure on deposits to Rs 5 lakh from Rs 1 lakh. The deposit insurance scheme covers all banks operating in India including private sector, co-operative and even branches of foreign banks in India. There are some exemptions like deposits of foreign governments, deposits of central/state governments and inter-bank
The budget has set the divestment target at Rs 2.1 lakh crore for the upcoming fiscal year. It has maintained the current year gross borrowing at Rs 7.1 lakh
Government unveiled plans for India’s highways and railways, proposing 1.7 lakh crores for transport infrastructure that includes the accelerated development of highways and plans to monetize 12 lots of highway bundles.
The government plans to provide piped water across Indian households by 2024 with 3.60 lakh crores in
The government also announced 12,300 crores for the Clean India mission.

Tax Slab

Tax Slab 2020

Customs Duties

Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.
5% health cess to be imposed on the imports of medical devices, except those exempt from
Lower customs duty on certain inputs and raw materials like fuse, chemicals, and
Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

Trade Policy

Customs Act being amended to enable proper checks of imports under
Rules of Origin requirements to be reviewed for certain sensitive
Provisions relating to safeguard duties to be strengthened to enable regulating such surge in imports in a systematic
Provisions for checking dumping of goods and imports of subsidized goods being
Suggestions for reviews of exemptions from customs duty to be crowd-sourced.
Excise duty proposed to be raised by roughly 10% on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
Anti-dumping duty on PTA abolished to benefit the textile

GST

Agriculture

Agriculture

Social Welfare

Enhance allocation of Rs 9000 Crore for senior citizens and ‘Divyang’
4,400 Crore allocated for cities to ensure clean air
Rs 53,700 Crore for welfare of schedule tribes
Rs 85,000 Crore for welfare of SC and other backward classes
Insurance cover increased to Rs 5 lakh per depositor

Infrastructure

 

Education Sector

Education

Health Care Sector

Health Care

Other

Rs 100 crore allotted to prepare for hosting G20 presidency in 2022
Allocation of Rs 30,757 crores for 2020-21 for Jammu and Kashmir and Rs 5,958 crores for Ladakh
FY21 fiscal deficit target pegged at 3.5% of GDP
The government will bring LIC IPO
Government to sell part holding in LIC, also in IDBI
Govt to sell govt stake in IDBI Bank to private investors
FY21 divestment target pegged at Rs 2.1 lakh crore
Certain specified categories of government securities will be open fully for NRIs
Nominal GDP growth for FY21 revised to 10%

Central Government Fiscal Account

 

Particular (In Crore)

 

2018-2019

Actuals

2019-2020

Budget Estimates

2019-2020

Revised Estimates

2020-2021

Budget Estimates

1.Revenue Estimates 1552916 1962761 1850101 2020926
2.Tax Revenue ( Net Centre) 1317211 1649582 1504587 1535909
3.Non Tax Revenue 235705 313179 345514 385017
4.Capital Receipts 762197 823588 848451 1021304
5.Recovery of loans 18052 14828 16605 14967
6.Other Receipts 94727 105000 65000 210000
7.Borrowing and other Liabilities 649418 7036760 766846 796337
8.Total Receipts (1+4) 2315113 2786349 2698552 3042230
9. Total Expenditure (10+13) 2315113 2786349 2698552 3042230
10.On Revenue account of which 2007399 2447780 2349645 2630145
11. Interest Payments 582648 660471 625105 708203
12. Grants in Aid for creation of capital assests  

191781

 

207333

 

191737

 

206500

13. On Capital account 307714 338569 348907 412085
14. Revenue Deficit (10-1) 454483 485019 499544 609219
15. Effective Revenue Deficit (14-12) 262702

(1.4)

277686

(1.3)

307807

(1.5)

402719

(1.8)

16. Fiscal Deficit [9-(1+5+6)] 649418

(3.4)

703760

(3.3)

766846

(3.8)

796337

(3.5)

 

17.Primary Deficit (16-11)

66770

(0.4)

43289

(0.2)

141741

(0.7)

88134

(0.4)

Budget Review Report (FY20-21)


Arihant Team
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